Altek - AGM Information 2016 | FinancialReports.eu

Stock Code: 3059

【 Translation 】

Altek Corporation

Handbook for

2016 Annual General Shareholders’ Meeting

Date : June 17, 2016 at 9 a.m.

Place: No.2, Zhanye 1st Rd., Hsinchu City, Taiwan

‐‐‐‐‐‐Disclaimer‐‐‐‐

This English version is a translation based on the original Chinese version. Where any discrepancy arises between the two versions, the Chinese version shall prevail.

I. Meeting Procedure………….....................................................................	1
II. Meeting Agenda
1. Discussion Item‐Revisions of Articles of Incorporation………….…………….	2
2. Report Items………………………………………………………………………...……………..	3
3. Recognition Items………….…………….........................................……………….	5
4. Discussion and Election Items…………………….…………………..…...................	7
5. Special Motions……………………………………………………………………………………	12
6. Adjournment…………………………………………………………………………….…………	12
III. Attachment
1. Comparison Table for ” Articles of Incorporation” ‐‐Before and After	13
Revision………………………………………….…………………………………..…………………
2. 2015 Business Report……………………………………….…………….…………………..	16
3. 2015 Supervisors Audit Report……………………………………………..……….…….	17
4. 2015 CPA Audit Report and Financial Statements (Consolidated)……....	18
5. Comparison Table for ”Procedures for Acquisition or Disposal of	27
Assets”‐‐Before and After Revision……………………………………….……….………
6. General principles, methods and contents of private placement of	28
Altek Corp……………………………………………………………………………………..….….
7. CPA opinion on the reasonableness of the price of the transaction……….	33
8. Current Shareholding of Directors and Supervisors……………………………....	34

IV. Appendices

V. Appendices
1. Corporate Charter (Articles of Incorporation)……………….………….……………	35
2. Regulations of Shareholders' Meeting Proceedings.……….….……….…………	42
3. Rules for Election of Directors and Supervisors.….……..……………….…...……	45

Altek Corporation

Procedure for 2016 Annual General Shareholders’ Meeting

1. Call Meeting to Order

2. Chairman’s Address

3. Discussion Item

(1) To revise the Articles of Incorporation.

4. Report Items

(1) Implementation of Share Buyback Program.
(2) Distribution of Employees’ compensation as well as the remuneration for the Directors and Supervisors.
(3) 2015 Business Report.
(4) 2015 Supervisors Audit report.

5. Recognition Items

(1) 2015 Business Report and Financial Statements.
(2) Distribution of 2015 Earnings.

6. Discussion and Election Items

(1) To approve the proposal for cash distribution of capital surplus generated from cash injection.
(2) To approve the revisions to ”Procedures for Acquisition or Disposal of Assets”.
(3) To approve issuance of new common shares in private placement and/or issuance of domestic or overseas convertible bonds in private placement.
(4) To approve the cash injection of Altek Semiconductor (Cayman) Co., Ltd., one of Altek’s subsidiaries.
(5) To approve the adjustment of the investment structure of the Company’s subsidiary‐Altek Biotechnology Corporation as well as to approve the cash injection..etc.
(6) Election to Fill the Vacancy of 7th Independent Director.

7. Special Motions

8. Adjournment

Discussion Item‐‐

1. To revise the Articles of Incorporation ( Proposed by the Board of Directors)

Explanation:

(1) In order to conform to the amendments of related company law, the company hereby proposes to amend the Articles of Incorporation.
(2) Please refer to page 13 (Attachment 1) for details.
(3) Please proceed to discuss.

Resolution:

Reports Items

1. Implementation of Share Buyback Program.

Explanation:

(1) The boards of Directors resolved the share buyback program last year to transfer to employees.
(2) Please refer to the implementation as the following table.

	As of April 19, 2016
Item	Note
Resolution date of the Board of Directors	Sep. 8, 2015
Purpose of Buyback	transfer to employees
Price range	NTD 20～30
Volume	3,433,000 shares
Total amount	NTD 96,138 thousand dollars
Average cost	NTD 28.00
Accumulated number of company shares held	3,433,000 shares

(3) Please review.

2. Distribution of Employees’ compensation as well as the remuneration for the Directors and Supervisors.

Explanation:

(1) Subject to the related laws and afore‐revised Articles of Incorporation, the Company sets aside NTD 45,124 thousand dollars (15% of annual profit NTD 300,828,746) for the Employees’ compensation and sets aside NTD 6,017 thousand dollars (2% of annual profit) as the remuneration for the Directors and Supervisors. Above mentioned compensation and remuneration will be distributed in cash.
(2) Please review.

3. 2015 Business Report

Explanation:

(1) Please refer to page 16 (Attachment 2) for the 2015 Business Report .
(2) Please review.

4. 2015 Supervisors Audit report

Explanation:

(1) Please refer to page 17 ( Attachment 3) for the 2015 Supervisor’s Audit Report .
(2) Please review.

Recognition Items

1. 2015 Business Report and Financial Statements (Proposed by the Board of Directors)

Explanation:

（1）The Company’s 2015 Financial Statements were audited by certified public accountant, Mrs. Yu‐Kuan Lin and Mr. Dian‐Yi Li of PricewaterhouseCoopers Taiwan (pwc).
（2）Please refer to page 16 ( Attachment 2) for the 2015 Business Report and refer to page 18~26 ( Attachment 4) for the 2015 CPA Audit Report and Financial Statements.
（3）Please proceed to recognize.

Resolution:

2. Distribution of 2015 Earnings (Proposed by the Board of Directors)

Explanation:

(1) Subject to the Company Act and Articles of Incorporation, the Board of Directors has ratified the Distribution of 2015 Surplus Earnings as the following table.
(2) Upon the approval of the 2016 annual shareholders’ meeting, it is proposed that the Board of Directors be authorized to resolve the ex‐dividend date, target date for distribution and other relevant issues. Also, the Chairman is authorized to adjust the cash to be distributed to each share based on the number of actual shares outstanding on the basic date for distribution.
(3) Please proceed to recognize.

Resolution:

ALTEK CORPORATION SURPLUS EARNINGS DISTRIBUTION TABLE

Year 2015

Unit: NTD＄

Items	Amount	Amount
	Sub‐total	Total
Beginning retained earnings Less：Actuarial gain (loss) on defined benefit plans Less：Adjustment of retained earnings accounted for under the equity method Adjusted Unappropriated retained earnings Unappropriated retained earnings‐after adjustment 2015 net profit after tax Less：10% legal reserve Distributable net profit Distributable items: Dividend to shareholders(cash)‐ NT$ 0.5 per share Unappropriated retained earnings	(3,645,075) (25,023,709)	2,802,308,973 (28,668,784)

		2,773,640,189 273,642,774 (27,364,277)
		3,019,918,686 (134,139,926)
		2,885,778,760

Discussion and Election Items

1. To approve the proposal for cash distribution of capital surplus generated from cash injection. ( Proposed by the Board of Directors)

Explanation:

(1) Subject to Article 241 of the Company Act, the company hereby proposes to distribute NTD 134,139,926 dollars, which comes from capital surplus generating from cash injection, in cash to the shareholders. The cash will be distributed according to the shares each shareholder owned and recorded in the shareholders roster at the target date for distribution. The cash less than NTD 1 dollar will not be distributed to the shareholder but will be listed as other revenues of the Company instead. If calculated by the date of March 10th, 2016, the total shares for issuance is 268,279,852 shares (4,413,973 shares of treasury stock had been deducted from the amount already), and each share will get approximately NTD 0.5 dollars in cash.
(2) After the proposal has secured the shareholder’s approval in the 2016 annual general shareholders’ meeting, the Board of Directors may enact the target date for distribution, the actual date for distribution as well as other related matters. It’s proposed to authorize the Chairman to fully in charge if there’s any change to the Company’s capital stock which may change the ratio of total shares for issuance thus influence the ratio of distribution per share to each shareholder.
(3) To sum up, it’s proposed to distribute NTD 0.5 dollar per share from the capital surplus and NTD 0.5 dollar per share from earnings. The total amount for distribution per share will be NTD 1 dollar and it will be done by cash.
(4) Please proceed to discuss.

Resolution:

2. To approve the revisions to ”Procedures for Acquisition or Disposal of Assets”. ( Proposed by the Board of Directors)

Explanation:

(1) In order to accommodate to the operation demand, the company hereby proposes to amend the Company’s “Procedures for Acquisition or Disposal of Assets”. Please refer to page 27 (Attachment 5) for details.
(2) Please proceed to discuss.

Resolution:

3. To approve issuance of new common shares in private placement and/or issuance of domestic or overseas convertible bonds in private placement. ( Proposed by the Board of Directors)

(1) The Company wishes to supply operating capital and strength financial structure in order to maintain the sustainable development and strength the competitiveness of the Company. Also, concerning the efficiency of fund raising, the Company proposed to issue new common shares in private placement and/or issue domestic or overseas convertible bonds in private placement (hereinafter “the Fund Raising”) not exceeding 70,000,000 shares subject to Article 43‐6 of Securities and Exchange Act. When the private placement is carried out by issuing domestic or overseas convertible bonds, the price for transferring the bonds into common shares shall be determined at the time of private placement; and the amount of common shares transferred from the bonds shall be within the scope of the aforementioned 70,000,000 shares. It is proposed to authorize the Board of Directors to carry out the Fund Raising in one time or two times as well as in one way or multiple ways depending on the market condition and the operation demand of the Company.
(2) Except for the price determination of private placement, it is proposed to authorize the Board of Directors to determine, proceed or revise the

plan of private placement based on market conditions, including the total amount of issuance, the issuance terms and conditions, the transferring rules, the plan items, projected progresses for usage of the Fund Raising, anticipated benefits and any other items related to the plan of private placement. It is also proposed to authorize the Board of Directors to revise the plan of private placement based on the changing of laws, the market condition or receiving instructions from governmental authorities.

(3) Please refer to page 28‐32 (Attachment 6) for details of the methods, contents and general principles for the Fund Raising.
(4) The actual price for the Fund Raising will comply with the resolution of the annual shareholder’s meeting and refer to the the closing price of the Company’s common shares to make sure the price is a reasonable one and there’s no material impact to the shareholder’s benefit.
(5) Please proceed to discuss.

Resolution:

4. To approve the cash injection of Altek Semiconductor (Cayman) Co., Ltd., one of Altek’s subsidiaries. (Proposed by the Board of Directors)

Explanation:

(1) Altek Semiconductor ( hereinafter “Altek‐Semi”) is the affiliated enterprise of the Company and it has been working on the IC design as its main business. Semi‐Cayman is the holding company of Altek‐Semi, and the total issued shares of Semi‐Cayman is 28,000,000 shares. The Company currently owns 71.4% stake of Semi‐Cayman after Semi‐Cayman carried out a cash injection of 8,000,000 shares for Altek‐Semi employees’ subscription(approved by the Company’s Board of Directors convened on Sep. 8, 2015 ).
(2) In order to accommodate to the business demand, it is proposed to partner with strategic investor as well as financial investor that will be beneficial to the Company to maintain Altek group’s mid‐term as well as long‐term growth, competitiveness, and profit. It is proposed to

consent to the cash injection of Semi‐Cayman not exceeding the amount of 12,000,000 shares, and the issuance can be done in one time or separately. The Company may forfeit all or part of the subscription of shares

(3) The price for the above mentioned cash injection of Semi‐Cayman shall not be lower than the net value per share stated in the latest financial statement certified or reviewed by the CPA before Semi‐Cayman’s Board of Directors resolves the cash injection. And the independent expert will be providing the opinion regarding the reasonableness of the price. The Company shall also take the market condition and operation situation into consideration to determinate the price for cash injection.
(4) It is proposed to authorize the Board of Directors to deal with matters relating to the cash injection of Semi‐Cayman.
(5) Please proceed to discuss.

Resolution:

5. To approve the adjustment of the investment structure of the Company’s subsidiary‐Altek Biotechnology Corporation as well as to approve the cash injection..etc. (Proposed by the Board of Directors)

Explanation:

(1) In 2015’s annual shareholder’s meeting (held on June 2[nd] , 2015), the Company resolved to split‐up its medical division into wholly‐owned affiliate of the Company called Altek Biotechnology Corporation (hereinafter “ALTEK‐BIO”) with NTD 400,000,000 dollars business value. At the ninth time meeting of the seventh Board of Directors, it’s resolved to adjust the target date for spilt‐up from September 30[th] , 2015 to January 4[th] , 2016 and Hsinchu Science Park Bureau had approved the change on January 22th, 2016. The current paid‐up capital of ALTEK‐BIO is NTD 401,000,000 dollars, and the face value per share is NTD 10 dollars. Now the total issued shares are 40,100,000 shares.

(2) In order to accommodate the business demand, the Company will adjust its direct investment of ALTEK‐BIO to indirect investment through its wholly owned affiliate Altek International Holding (BVI) Co., Ltd (hereinafter “ALTEK‐BIO BVI”) (temporarily named) which 100% owns Altek Biotechnology Holding (Cayman) Co., Ltd. (hereinafter “ALTEK‐BIO Cayman”). With reference to the net value of financial statement for the first quarter of year 2016 reviewed by accountant as well as an opinion offered by accountant on the reasonableness of price for the equity shares, the total amount of shares for the transaction is 40,100,000 shares, and the sum of money for the transaction is USD 12,865,921 (equivalent to NTD 415,376,252). Therefore, the average price for the transaction per share is approximately USD 0.3208459 (equivalent to NTD 10.3585). For more details of the opinion on the reasonableness of price for the equity shares, please refer to Attachment 7 (page 33)
(3) Furthermore, for the purpose of attracting and keeping personnel with professional skills as well as partnering with strategic investors or financial investors to maintain the medium term and long term competitiveness, growth and profits of Altek Group, it is purposed to issue new shares not exceeding 18,000,000 shares via cash injection of ALTEK‐BIO Cayman within one time or several times, and the Company may forfeit the subscription of shares partially or as a whole. Or the Company may dispose part of its shares of ALTEK‐BIO Cayman to its employees and/or strategic investors or financial investors within the scope of 18,000,000 shares.
(4) The aforementioned price of cash injection and/or the disposal of shares of ALTEK‐BIO Cayman shall not be lower than the net value per share in the latest certified or reviewed financial statements by accountant before ALTEK‐BIO Cayman’s Board of Directors resolves the cash injection or the Company’s Board of Directors resolves the disposal of its shares. And the opinion on the reasonableness of price shall be provided by the independent expert with reference to the market condition and the operation situation. The Company forfeits the subscription of shares and lets the specific personnel to subscribe. The target of the specific personnel is limited to the employees, strategic investors and financial investors that can be beneficial to the Company as the general principle. This general principle also applies when the

Company disposes its shares.

(5) After the annual shareholders’ meeting, it is purposed to authorize the Board of Directors regarding the related issues of re‐structuring ALTEK‐BIO’s investment framework as well as the cash injection of ALTEK‐BIO Cayman and/or the disposal of equity shares of ALTEK‐BIO Cayman.
(6) Please proceed to discuss.

Resolution:

6. Election to Fill the Vacancy of 7th Independent Director. ( Proposed by the Board of Directors)

Explanation:

(1) Due to vacancy of the 7[th] Independent Director, the Company will elect one seat of Independent Director. The term for the newly elected Independent Director is from June 17[th] , 2016 to June 18[th] , 2017.
(2) Please refer to the following table for personal information of Independent Director Candidate.

Name: Wen Hsieh, Lai

Education: China University of Technology

Experience: Chairman of Chieh‐Cheng Engineering Co., Ltd..,etc. Shareholding: 0.

(3) Please vote.

Voting Results:

Special Motions

Adjournment

Attachment 1

Comparison Table for” Articles of Incorporation” ‐‐Before and After Revision

Article	Article before Revision		Article after Revision	Reason for Revision
15	The Company shall have seven (7) directors and three (3) supervisors to be elected by the shareholders’ meeting from among candidates with disposing capacity. The term of office is three (3) years and they may continue in office if re‐elected. Among the above‐mentioned number of directors, the Company may have two (2) of the directors as independent directors, who shall be elected by the shareholders under the candidate nomination system. The election of independent and non‐independent directors shall be held together but the votes shall be calculated separately. The aggregate shareholding percentages of the entire bodies of directors and supervisors shall comply with “the Rules and Review Procedure for Director and Supervisor Share Ownership Rate at Public Companies” by the securities supervisory authorities.		The Company shall have seven (7) to nine (9)directors and three (3) supervisors to be elected by the shareholders’ meeting from among candidates with disposing capacity. The term of office is three (3) years and they may continue in office if re‐elected. Among the above‐mentioned number of directors, the Company may havenot less than two (2) of the directorsas well as not less than one‐fifth of the directors as independent directors, who shall be elected by the shareholders under the candidate nomination system. The election of independent and non‐independent directors shall be held together but the votes shall be calculated separately. The aggregate shareholding percentages of the entire bodies of directors and supervisors shall comply with “the Rules and Review Procedure for Director and Supervisor Share Ownership Rate at Public Companies” by the securities supervisory authorities. If the Company sets up the audit committee to replace supervisors’ position, articles concerning supervisors herein will be temporarily suspended. The audit committee shall be composed of the entire number of independent directors.	To conform to the amendment of the Company Act

25	Distribution of the dividends and bonuses shall be done in percentage of shares held by each shareholder accordingly. The Company shall not distribute dividends or bonuses when there is no profit.		The Company shall have ten percent (10%) to twenty percent (20%) of profit of the current year distributable as employees' compensation and not more than two (2%) of profit of the current year distributable as directors’ remuneration. However, the company's accumulated losses shall have been covered. The Company may have the profit distributable as employees' compensation in the form of shares or in cash. The employees to distribute the compensation include the staffs in the affiliate companies which the Company owns more than fifty percent (50%) of the shares. Profit of the current year mentioned in the first paragraph shall be profit before tax and employees’compensation and directors’remuneration. The Company may, by a resolution adopted by a majority vote at a meeting of board of directors attended by two‐thirds of the total number of directors, have the profit distributable as employees'compensation and directors’remuneration; and in addition thereto a report of such distribution shall be submitted to the shareholders'meeting.	To conform to the amendment of the Company Act
26	If the Company has earnings after the annual final accounts, after paying profit‐seeking enterprise income tax as well as making up losses of the previous years, the Company shall first set aside ten percent (10%) of said earnings as legal reserve. Thereafter, the Company shall set aside or reverse a special reserve in accordance with the applicable		If the Company has earnings after the annual final accounts, after paying profit‐seeking enterprise income tax as well as making up losses of the previous years, the Company shall first set aside ten percent (10%) of said earnings as legal reserve.Where such legal reserve amounts to the total authorized capital, this article shall not apply.Thereafter, the Companyshall set aside or	To conform to the amendment of the Company Act

	laws and regulations. Any balance of the earnings shall be distributed as follows: 1. 10% to 20% of balance of the earnings as bonus to employees. 2. 2% of balance of the earnings as remuneration to the directors and supervisors. 3. Dividend to the shareholders. The aforementioned distribution shall be submitted to the shareholders’ meeting by the board of directors to have the permission from the shareholders. Above bonus distributed to employees shall include those employees working in the subordinate companies of the Company that the company owns over fifty percent of the shareholding.		reverse a special reserve in accordance with the applicable laws and regulations.After adding in the surplus earning that has not yet distributed in the past, the board of directors may submit the surplus earning distribution proposal to the shareholder’s meeting for approval.
32	With the consent of the promotes in the promoter‘s meeting, the Articles of Incorporations were duly stipulated on December 20, 1996. ……..(omitted) The Articles were duly amended on June 15, 2010 as the 16th amendment. The Articles were duly amended on June 13, 2012 as the 17th amendment.		With the consent of the promotes in the promoter‘s meeting, the Articles of Incorporations were duly stipulated on December 20, 1996. ……..(omitted) The Articles were duly amended on June 15, 2010 as the 16th amendment. The Articles were duly amended on June 13, 2012 as the 17th amendment. The Articles were duly amended on June 17, 2016 as the 18th amendment.	To conform to the amendment of the above articles

Attachment 2

2015 Business Report

First of all, I would like to thank all shareholders and employees’ continuing support throughout the year, Altek Corp. has been active to transform itself into digital image solutions supplier. In 2015, Altek has provided image signal processor solution, dual‐ camera module solution and the license of image processing technologies and these have made Altek become part of the supply chain of international smart phone companies as the benefits of transformation which are gradually emerging. However, dual‐camera module business does not prosper as expected due to the development of dual‐camera smart phones has not yet become the mainstream of the market and also the market for wearable‐camera product has speedy changes, therefore the consolidated revenues of 2015 is about NTD 12,490 million dollars, which decreases 19% than 2014. The good news is that compare to the consolidated gross margin of 10% of 2014, it has reached 13% in 2015. Net income after tax is NTD 276,643 thousand dollars. The earning per share‐after tax is NTD 1.02.

The digital image applications have been widely used nowadays, and Altek is experienced to provide the customers all kinds of digital image solutions, including image signal processor, camera module, the license of digital image technologies, and the wearable camera products. Since it has gradually become a trend for the smart phone to install dual camera design, it’s generally estimated the first tier smart phone makers will promote their main brand of smart phones accompanying the dual‐camera function at the second quarter of this year. Also, as related applications have become more completed, it is expected that the smart phones with dual‐cameras will become more commonly used. As for the wearable camera product, the market share is expected to grow if there are no big changes in the market. Moreover, in order to enhance the safety of car driving and make a smarter automobile, the application of autotronic imaging solutions has gradually become a must to the industry and is expected to prosper in the future. Altek will take advantages of its experiences on the image technologies and invest more resources and effort to develop products that meet the market demand.

As for this year, due to the speedy changes of new technologies, new materials and new skills, Altek and all of the employees will constantly strengthen our systems, process and production management as well as to develop the core technologies of digital images to enhance the added‐value of the products and enhance the market share and influence in the digital image area. The management team and all the employees of Altek will constantly work hard, follow the principle of “innovation, quality, cost, flexibility, efficiency” to pursue the biggest benefits of the shareholders.

Chairman & CEO Ru Win Hsia

Attachment 3

Supervisors’ Audit Report

To ： The 2016 General Meeting of Shareholders

The undersigned has duly audited the Operating Report, Financial Statements certified by CPA Mrs. Yu Kuan Lin and Mr. Dian Yi Li of Pricewaterhouse Coopers Firm (pwc) together with the Schedule of Surplus Earnings Distribution prepared by the Board of Directors for the year of 2015 and found the same to be true and correct. Therefore, in accordance with Article 219 of the Company Law of the Republic of China, the undersigned takes pleasure in submitting this report for your perusal and acceptance.

Altek Corporation Supervisors:

Tim Liou

Amy Chien

Alex Liou

March 18, 2016

Attachment 4

2015 CPA Audit Report and Financial Statements (Consolidated)

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

PWCR15000184 (In Thousands of New Taiwan Dollars)

To Altek Corporation

We have audited the accompanying consolidated balance sheets of Altek Corporation and subsidiaries as of December 31, 2015 and 2014, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the accompanying consolidated financial statements referred to above present fairly, in all material respects, the financial position of Altek Corporation and subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for the years then ended in conformity with the “Rules Governing the Preparation of Financial Statements by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

~1~

We have also audited the parent company only financial statements of Altek Corporation as of the years ended December 31, 2015 and 2014. In our report dated March 18, 2016, we expressed an unqualified opinion on these financial statements.

PricewaterhouseCoopers, Taiwan Hsinchu, Taiwan Republic of China

March 18, 2016

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(3) 6(4) 6(5) 6(6) 6(7) 6(8) 6(23) 6(9)	December 31, 2015 December 31, 2014 AMOUNT % AMOUNT % �� �� � �� �� �� � �� � �� � �� � �� �� �� �� �� � �� � �� � �� � �� � �� � �� � �� � �� � �� � �� �� �� �� �� � �� � �� � �� � �� �� �� �� �� � �� � �� � �� � �� � �� � �� �� �� �� �� � ��	December 31, 2014	December 31, 2014
				%
Current assets Cash and cash equivalents Financial assets at fair value through profit or loss - current Notes receivable, net Accounts receivable, net Other receivables Current income tax assets Inventories, net Prepayments Other current assets Current Assets Non-current assets Financial assets at cost - non current Investments accounted for using equity method Property, plant and equipment, net Intangible assets Deferred income tax assets Other non-current assets Non-current assets Total assets
				��

(Continued)

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ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	December 31, 2015 December 31, 2014 Notes AMOUNT % AMOUNT % 6(10) and 12(2) �� �� �� � 12(2) �� �� �� �� 12(2) �� � �� � �� � �� � 6(13) �� � �� � �� � �� � �� �� �� �� 6(13) �� � �� � 6(23) �� � �� � 6(11) �� � �� � �� � �� � �� �� �� �� 6(14) �� �� �� �� 6(15) �� �� �� �� 6(16) �� � �� � �� � �� � �� �� �� �� 6(17) �� � �� � 6(14) � �� �� � � �� �� �� �� �� � �� � �� �� �� �� 9 11 �� �� �� ��	December 31, 2014	December 31, 2014
			%
Current liabilities Short-term borrowings Accounts payable Other payables Current income tax liabilities Provisions for liabilities - current Other current liabilities Current Liabilities Non-current liabilities Provisions for liabilities - noncurrent Deferred income tax liabilities Other non-current liabilities Non-current liabilities Total Liabilities Equity attributable to owners of parent Share capital Common stock Capital surplus Capital surplus Retained earnings Legal reserve Special reserve Unappropriated retained earnings Other equity interest Other equity interest Treasury stocks Equity attributable to owners of the parent Non-controlling interest Total equity Significant contingent liabilities and unrecognised contract commitments Significant subsequent event after the balance sheet date Total liabilities and equity
			��

The accompanying notes are an integral part of these consolidated financial statements.

21 ~4~ 21

ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31

(Expressed in thousands of New Taiwan dollars,except earning per share amounts)

Items	Year ended December 31 2015 2014 Notes AMOUNT % AMOUNT % � �� �� � �� �� 6(21)(22) � �� �� �� �� �� �� �� �� 6(21)(22) � �� �� �� �� � �� �� �� �� � �� �� �� �� � �� �� �� �� �� � �� � 6(18) �� � �� � 6(19) �� �� �� � 6(20) � �� �� �� � 6(6) � �� �� �� �� �� � �� � �� � �� � 6(23) � �� �� �� � � �� � � �� �
Sales revenue Operating costs Net operating margin Operating expenses Selling expenses General & administrative expenses Research and development expenses Total operating expenses Operating profit Non-operating income and expenses Other income Other gains and losses Finance costs Share of loss of associates and joint ventures accounted for under equity method Total non-operating income and expenses Profit before income tax Income tax expense Profit for the year

Items

Year ended December 31
2015
2014
Notes
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Sales revenue
Operating costs
Net operating margin
Operating expenses
Selling expenses
General & administrative expenses
Research and development expenses
Total operating expenses
Operating profit
Non-operating income and expenses
Other income
Other gains and losses
Finance costs
Share of loss of associates and joint
ventures accounted for under equity
method
Total non-operating income and
expenses
Profit before income tax
Income tax expense
Profit for the year

(Continued)

~5~ 22

ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31

(Expressed in thousands of New Taiwan dollars,except earning per share amounts)

Items	Year ended December 31	Year ended December 31	Year ended December 31
	2015	% � �� � � � �� � � � � � � � � � �� ��	2014
			AMOUNT � �� �� �� �� �� �� �� � �� � �� � �� �� � �� � �� �� � �� �
Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss Actuarial gain on defined benefit plan Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss Currency translation differences of foreign operations Share of other comprehensive loss of associates and joint ventures accounted for under equity method Income tax relating to the components of other comprehensive income Components of other comprehensive income that will be reclassified to profit or loss Total other comprehensive (loss) income for the year Total comprehensive income for the year Profit, attributable to: Owners of the parent Non-controlling interest Profit for the year Comprehensive income attributable to: Owners of the parent Non-controlling interest Total comprehensive income for the year Basic earnings per share Total basic earnings per share Diluted earnings per share Total diluted earnings per share
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The accompanying notes are an integral part of these consolidated financial statements.

~6~ 23

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ALTEK CORPORATION AND SUBSIDIARIES	CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY	FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014	(Expressed in thousands of New Taiwan dollars)	Equity attributable to owners of the parent	Retained Earnings Other equity interest	Currency	translation	differences of	Unappropriated foreign Other equity -	Legal reserve Special reserve retained earnings operations others			� �� � �� � �� � �� � �			� � �� �� � �		� � � � �	� � � �� � �		� � � � �	� � � �� � �	� � �� � �		� � �� �� �	� � � � �		� �� � �� � �� � �� � �			� �� � �� � �� � �� � �			�� � � �� � �			� � � �� � �		� � � � ��		� � � � � ��	� � � � �		� � � �� � �				� � � � �	� � �� � �		� � � �� � �� �	� � � � �		� �� � �� � �� � �� �� ��	The accompanying notes are an integral part of these consolidated financial statements.	~7~
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											For the year ended December	31, 2014	Balance at January 1, 2014	Appropriation of 2013	losses	Special reserve	Share-based payment	transactions	Disposal of treasury shares	Distribution of subsidiary	cash dividends	Cash capital reduction	Profit for the year	Other comprehensive	income for the year	Non-controlling interest	Balance at December 31, 2014 24		For the year ended December	31, 2015	Balance at January 1, 2015	Appropriation of 2014	earnings	Legal reserve	Cash dividends and capital	surplus used to issue	cash to shareholders	Share-based payment	transactions	Issuance of restricted shares	to employees	Purchase of treasury shares	Changes in ownership	interests in subsidiaries	Difference between	consideration and	carrying amount of	subsidiaries acquired	Profit for the year	Other comprehensive	income for the year	Non-controlling interest	Balance at December 31,	2015

ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

Years ended December 31

CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated profit before tax for the year
Adjustments to reconcile profit before tax to net cash used
in operating activities
Income and expenses having no effect on cash flows
Depreciation expense
Amortisation expense
Provision for doubtful accounts
Net (gains) loss on financial assets at fair value through
profit or loss
Impairment loss on investments accounted for using
equity method
Impairment of financial assets
Gain on disposal of financial assets at amortised cost
Interest expense
Interest income
Cash dividends income
Share-based payment compensation cost
Share of loss of associates and joint ventures accounted
for under equity method
Gain on disposal of property, plant and equipment
Changes in assets/liabilities relating to operating activities
Net changes in assets relating to operating activities
Financial assets at fair value through profit or loss
Notes receivable
Accounts receivable
Other receivables
Inventories
Prepayments
Other current assets
Net changes in liabilities relating to operating
activities
Accounts payable
Other payables
Provisions for liabilities
Other current liabilities
Other non-current liabilities
Cash generated from operations
Interest received
Cash dividends received
Interest paid
Income tax paid
Net cash provided by operating activities

Notes
2015
2014
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(Continued)

~8~

ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at cost
Proceeds from liquidation of financial assets measured at
cost
Proceed from capital reduction of financial assets measured
at cost
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Increase in intangible assets
(Increase) decrease in refundable deposits
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings
Decrease in guarantee deposits
Employee stock options exercised
Proceeds to acquire treasury stock
Payments of cash dividends
Payments for cash capital reduction
Changes in non-controlling interest
Net cash used in financing activities
Effect of exchange rate
Increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

Years endedDecember 31
Notes
2015
2014
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The accompanying notes are an integral part of these consolidated financial statements.

26 26 ~9~

Attachment 5

Comparison Table for ”Procedures for Acquisition or Disposal of Assets”‐‐Before and After Revision

Article before Revision	Article after Revision	Reason for Revision
Article 10 I.The investment in a specific short‐term securities (except for bonds, bank debentures, commercial paper, banker’s acceptance, bond or bond funds with repurchase or reverse repo transactions), membership card and intangible assets may not exceed 10% of the Company’s net value stated in the latest financial statement. The total book value of short‐term securities invested by the Company may not exceed 20% of the Company’s net value stated in the latest financial statement. II.The total book value of long‐term securities invested by the Company may not exceed 100% of the total amount of the Company’s net value stated in the latest financial statement. III.The total book value of real property purchased by the Company for non‐operating use may not exceed NTD 50,000,000 dollars.	Article 10 I.The investment in a specific short‐term securities (except for bonds, bank debentures, commercial paper, banker’s acceptance, bond or bond funds with repurchase or reverse repo transactions), membership card and intangible assets may not exceed 10% of the Company’s net value stated in the latest financial statement. The total investment amountof short‐term securities invested by the Company may not exceed 20% of the Company’s net value stated in the latest financial statement. II.The totalinvestment amount of long‐term securities invested by the Company may not exceed 100% of the total amount of the Company’s net valuetogether with the Company’s long‐term liability stated in the latest financial statements. III.The totalinvestment amount of real property purchased by the Company for non‐operating use may not exceed NTD 50,000,000 dollars.	To accommodate to the operation demand.

Attachment 6

General principles, methods and contents of private placement of Altek Corp.

General principles, methods and contents of Capital Injection：

I. The amount of Capital Injection It is proposed to the shareholders’meeting to authorize the Board of Directors to choose proper timing and methods herein for the cash Injection within the amount of 70,000,000 shares. The Board of Directors shall take into account the marketing environment as well as the company’s financial condition and act in accordance with the related laws and regulations. When the private placement is carried out by convertible corporate bonds within Taiwan or overseas ( hereinafter “Convertible Corporate Bonds”), the amount of the common shares that can be transferred shall be limited within the scope of 70,000,000 shares and the transferred price is determined at the time of private placement.
II. Private placement carried out by common shares：
The basis and reasonableness for the price determination of private placement： The private placement price carried out by common shares shall not be lower than 80% of the higher Reference Price (as defined below) of the following two calculations.
- (1) The simple average closing price of the common shares of the Company for either the 1, 3, or 5 business days before the price determination date, after adjustment for any distribution of stock dividends, cash dividends or capital reduction.
- (2) The simple average closing price of the common shares of the Company for the 30 business days before the price determination date, after adjustment for any distribution of stock dividends, cash dividends, or capital reduction.
The private placement price carried out by common shares shall not be lower than 80% of the higher Reference Price (as defined above).
It is proposed to the shareholders meeting to authorize the Board of Directors to decide the actual price or the actual convert price of private placement within the scope resolved by the shareholders meeting and take the marketing environment at the price determination date into account as well. The Board of Directors shall also consider the restriction on transfers for three full years specified in Article 43‐8 of the Securities and Exchange Act, the related laws and the regulations as well as the closing price of the common shares.
Selection methods of choosing specific persons for private placement：

The investor of the private placement shall be strategic investors, and through the experiences, skills, knowledge, reputation or marketing channel of such strategic investors, they can be helpful to increase the Company’s competitiveness, operation performance and profits. It is proposed to the shareholders’meeting to authorize the Board of Directors to review the related certificates of qualifications from the specific persons. When the identities of placees are confirmed, they need to send out applications to the competent authorities, if applicable, and receive approvals before they can make payments. If the said placees of the private placement forfeit the subscription, the Board of Directors is authorized to contact other placees to carry out private placement pursuant to the aforementioned laws and regulations.

The necessity for carrying out private placement： In consideration of capital raising effectiveness, convenience, issuance cost and the demand for strategic investors, as well as the fact privately placed securities are restricted on transfers for three full years that ensures the long‐term cooperation between the Company and the strategic investors. Therefore the company will carry out private placement to raise capital, which also increases the flexibility in the source of capital. The capital raised by the private placement will be used to enrich the fund for operation to contribute to the long term development of the Company. The anticipated benefits to the company will be lowering costs of purchase, increasing efficiency of skill development and facilitating the company’s stable growth, thereby protecting the rights and interests of the company’s shareholders.

The private placement will be carried out in one time or two times depending on the condition of the marketing environment as well as the specific persons.

(1) Private placement carried out in one time
A. Usage of proceeds：It’s scheduled to use the proceeds within three years after the private placement has been carried out. The proceeds will be used to enhance the skills, develop products, lower cost, and expand market as well as to strengthen customer relationships relating to digital image.
B. The anticipated benefits：It’s beneficial to the growth of the Company’s business, and to decrease the Company’s operation risks as well as to enhance the rights of the shareholders.
(2) Private placement carried out in two times

First time

A. Usage of proceeds：It’s scheduled to use the proceeds within three years after the private placement has been carried out. The proceeds will be used to enhance the skills, develop products, lower cost, and expand market as well as to strengthen customer relationships relating to digital image.

B. The anticipated benefits：It’s beneficial to the growth of the Company’s business, and to decrease the Company’s operation risks as well as to enhance the rights of the shareholders.

Second time

  - A. Usage of proceeds：It’s scheduled to use the proceeds within three years after the private placement has been carried out. The proceeds will be used to enhance the skills, develop products, lower cost, and expand market as well as to strengthen customer relationships relating to digital image.

  - B. The anticipated benefits：It’s beneficial to the growth of the Company’s business, and to decrease the Company’s operation risks as well as to enhance the rights of the shareholders.

The rights and obligations of private placement carried out by common shares is the same as the issued common shares except the restriction on transfers specified in Article 43‐8 of the Securities and Exchange Act.
III. Private placement carried out by Convertible Corporate Bonds within Taiwan or overseas
Duration：No more than seven years starting from the date of private placement.
Rate：It is proposed to the shareholders’ meeting to authorize the Board of Directors to decide the actual rate depending on the marketing environment.
Face value：NTD 100,000 or its multiple times；USD10, 000 or its multiple times.
The private placement price carried out by domestic or overseas Convertible Corporate Bonds shall not be lower than 80% of the theoretical price and the transferred price shall not be lower than 80% of the higher price of the following two calculations：
(1) The simple average closing price of the common shares of the Company for either the 1, 3, or 5 business days before the price determination date, after adjustment for any distribution of stock dividends, cash dividends or capital reduction.
(2) The simple average closing price of the common shares of the Company for the 30 business days before the price determination date, after adjustment for any distribution of stock dividends, cash dividends, or capital reduction.
The investor of the private placement shall be strategic investors, and through the experiences, skills, knowledge, reputation or marketing channel of such strategic investors, they can be helpful to increase the Company’s competitiveness, operation performance and profits. It is proposed to the shareholders’meeting to authorize the Board of Directors to review the related certificates of qualifications from the specific persons. When the identities of placees are confirmed, they need to send out applications to the competent authorities, if applicable, and receive approvals before they can make payments. If the said placees of the private placement forfeit the subscription, the Board of Directors is authorized to contact other placees to carry out private placement pursuant to the aforementioned laws and regulations.

The necessity for carrying out private placement： In consideration of capital raising effectiveness, convenience, issuance cost and the demand for strategic investors, as well as the fact privately placed securities are restricted on transfers for three full years that ensures the long‐term cooperation between the Company and the strategic investors. Therefore the company will carry out private placement to raise capital, which also increases the flexibility in the source of capital. The capital raised by the private placement will be used to enrich the fund for operation to contribute to the long term development of the Company. The anticipated benefits to the company will be lowering costs of purchase, increasing efficiency of skill development and facilitating the company’s stable growth, thereby protecting the rights and interests of the company’s shareholders.

The private placement will be carried out in one time or two times depending on the condition of the marketing environment as well as the specific persons.

(1)Private placement carried out in one time
A. Usage of proceeds：It’s scheduled to use the proceeds within three years after the private placement has been carried out. The proceeds will be used to enhance the skills, develop products, lower cost, and expand market as well as to strengthen customer relationships relating to digital image.
B. The anticipated benefits：It’s beneficial to the growth of the Company’s business, and to decrease the Company’s operation risks as well as to enhance the rights of the shareholders.

(2)Private placement carried out in two times First time

A. Usage of proceeds：It’s scheduled to use the proceeds within three years after the private placement has been carried out. The proceeds will be used to enhance the skills, develop products, lower cost, and expand market as well as to strengthen customer relationships relating to digital image.
B. The anticipated benefits：It’s beneficial to the growth of the Company’s business, and it can decrease the Company’s operation risks as well as enhance the rights of the shareholders.

Second time

A.Usage of capital：It’s scheduled to use the capital within three years after the private placement has been carried out to raise full amount of capital as planned. The capital will be used to enhance the skills, develop products, lower cost, and expand market as well as strength customer relationship relating to digital image.
B. The anticipated benefits：It’s beneficial to the growth of the Company’s business, and to decrease the Company’s operation risks as well as to enhance the rights of the shareholders.

The restrictions on transfers of private placement carried out by Convertible Corporate Bonds is pursuant to Article 43‐8 of the Securities and Exchange Act.
It’s proposed to the shareholder’s meeting to authorize the chairman of the Board of Directors or its designated proxy to represent the Company to sign the agreements and documents as well as in full charge of the matters relating to the private placement carried out by Convertible Corporate Bonds.
IV. There’s no occurrence of any material change in management control of the Company one year before the Board of Directors resolve to carry out private placement. If the private placement has been fully carried out (including the transfers of Convertible Corporate Bonds into common shares) within the scope of 70,000,000 shares, the ratio of the private placement shares is about 20.4% of the total capital stock (post‐money). The Company keeps the flexibility to carry out private placement in one time or two times to enhance the chances of engaging with different strategic investors in order to decrease the possibility of occurrence of any material change in management control of the Company.
V. For any other matters regarding the private placement that have not specified hereto, it is proposed to the shareholder’s meeting to authorize the Board of Director to handle in accordance with the related laws and regulations.

Attachment 7

CPA opinion on the reasonableness of the price of the transaction

Please refer to Chinese Agenda.

Attachment 8

Altek Corporation

Shareholding of Directors and Supervisors

Book closure date: April 19, 2016

Position	Name	Date elected	Shareholding while elected	Shareholding while elected	Current shareholding	Current shareholding
			Shares	Shareholding ratio (%) (Note 1)	Shares	Shareholding ratio (%) (Note 2)
Chairman	Ru Win Hsia	2014.06.19	1,782,764	0.45	757,934	0.28
Director	David Lin (Note 3)*	2014.06.19	19,923,000	5.06	13,946,100	5.09
Director	Simon Law*	2014.06.19	19,923,000	5.06	13,946,100	5.09
Director	Stan Hung	2014.06.19	0	0.00	0	0.00
Director	Jason Lin	2014.06.19	952,055	0.24	552,438	0.20
Independent Director	James Huang (Note 4)	2014.06.19	48,329	0.01	‐	‐
Independent Director	Jaime Tang	2014.06.19	0	0.00	0	0.00
Total			22,706,148	5.76	15,256,472	5.57
Supervisor	Tim Liou	2014.06.19	0	0.00	0	0.00
Supervisor	Amy Chien	2014.06.19	547,532	0.14	873,272	0.32
Supervisor	Alex Liou	2014.06.19	1,203	0.00	350,142	0.13
Total			548,735	0.14	1,223,414	0.45

The representative of Yitsang International Limited Company.

Note 1: Total issued shares as of April 21, 2014 are 394,158,321 shares.

Note 2: Total issued shares as of April 19, 2016 are 273,883,825 shares.

Note 3 : Reappointed on March 19, 2016.

Note 4 : Resigned on August 14, 2015.

Appendix 1 Articles of Incorporation

Chapter I General Provisions

Article 1: The Company is duly organized under the Company Act of the Republic of China as a company limited by Shares and is named Altek Corporation ( hereinafter “the Company”).

Article 2: The scope of business of the Company shall be as follows:

CC01080 Electronics parts and components manufacturing business.
F401010 International trade business。
F401021 Restricted telecommunication radio frequency equipment and 。

material import business

Researching, developing, designing, producing, manufacturing, and selling the following products: Digital Still Camera.

Conducting import and export trade relating to the Company’s business.

Article 3: The head office of the Company is located in Science‐Based Industrial Park, Hsinchu, Taiwan and shall be free to set up branch offices wherever and whenever the Company deems it necessary upon the resolution of board of directors as well as the approval of competent authorities.

Chapter II Shares

Article 4: The total capital amount of the Company is authorized at five billion New Taiwan dollars (NT$5,000,000,000), which consists of five hundred million (500,000,000) common shares with a par value of ten New Taiwan dollars (NT$10) per share. The shares can be issued in installments. The board of directors may resolve to issue the shares which have never been issued when needed.
The total capital amount mentioned in the preceding paragraph shall reserve three hundred million New Taiwan dollars (NT$300,000,000) separated into thirty million (30,000,000) shares with a par value of ten New Taiwan dollars (NT$10) per share. The reserved shares shall be used for issuing share subscription warrant in installments upon the resolution of the board of directors.

Article 5: The Company may reinvest in other enterprises as deemed necessary for its business operations, and its total reinvestment in other enterprises shall not be subject to the restriction of not more than forty percent (40%) of the Company’s paid‐in capital prescribed in Article 13 of the Company Act.
Article 6: The share certificates of the Company shall without exception be in registered form and affixed with the signatures or personal seals of three (3) or more directors of the Company. Also, the share certificates shall be duly certified or authenticated by the competent authority or a certifying institution authorized by the competent authority before issuance. Shares issued by the Company may not be in certificate form but shall be placed under the custody of a centralized securities custody enterprise.
Article 7: The Company’s stock affairs shall be handled in accordance with “the Regulations Governing the Administration of Shareholder Services of Public Companies”.
Article 8: All entries in the shareholders register due to share transfers shall be suspended when it is sixty (60) days prior to the regular shareholders’ meeting as well as thirty (30) days prior to the special shareholders’ meeting or five (5) days prior to the target date fixed for distributing dividends, bonus or any other benefits.

Chapter III Shareholders’ Meeting

Article 9: The shareholders’ meetings of the Company shall be of the following two kinds:
Regular shareholders’ meeting shall be held once per year within six (6) months from the closure of the fiscal year.
Special shareholders’ meetings may be held in accordance with applicable laws and regulations whenever necessary.

Article 10: The chairman of the board of directors shall preside the shareholders’ meetings. In case the chairman of the board of directors is on leave or absent or cannot exercise his/her power and authority for any cause, the designation of his/her duties shall be handled in accordance with Article 208 of the Company Act.

Article 11: A notice for convening a regular shareholders’ meeting shall be given thirty (30) days before the meeting. A notice for convening a special shareholders’

meeting shall be given fifteen (15) days prior to the meeting. The notice shall specify the date, the place and the subject(s) of the meeting.

Article 12: For any shareholders’ meeting, a shareholder may appoint a proxy to attend the meeting by using the proxy form issued by the Company and specifying the scope of proxy when he/she is absent for any cause. Shareholders attended by proxy shall be subject to the Company Act and also to “the Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies” issued by the competent authority.
Article 13: Each shareholder is entitled to one voting power in respect of each share in his/her/its possession.
Article 14: Unless otherwise provided by the Company Act, a resolution of the shareholders’ meeting shall be adopted by a majority votes of the shareholders present, who represent a majority of the total issued shares.

Chapter IV Directors, Supervisors and Managerial Officers

Article 15: The Company shall have seven (7) directors and three (3) supervisors to be elected by the shareholders’ meeting from among candidates with disposing capacity. The term of office is three (3) years and they may continue in office if re‐elected. Among the above‐mentioned number of directors, the Company may have two (2) of the directors as independent directors, who shall be elected by the shareholders under the candidate nomination system. The election of independent and non‐independent directors shall be held together but the votes shall be calculated separately. The aggregate shareholding percentages of the entire bodies of directors and supervisors shall comply with “the Rules and Review Procedure for Director and Supervisor Share Ownership Rate at Public Companies” by the securities supervisory authorities.

Article 16: The board of directors is organized by the directors and shall have the following authorities:

To submit operation plan.
To propose surplus earnings distribution or loss make‐up plans
To propose increase or decrease of the capital amount.
To enact major articles of incorporation and rules for the organization of the Company.
To appoint and dismiss the managerial officers of the Company.

To establish and terminate the branch offices,
To determine the budget and review the final accounts.
Other authorities granted by the resolution of the shareholders’ meetings or in accordance with the Company Act.
Article 17: The chairman of the board of directors shall be elected by a majority of
directors in attendance at the meeting attended by at least two‐third of the directors. The chairman of the board of directors shall represent the Company externally.
Article 18: Unless otherwise provided by the Company Act, meetings of the board of directors shall be called and chaired by its Chairman. In the case of emergency, the meeting may be convened at any time. The meeting notice of the board of directors shall specify the reasons for convening the meeting, and shall be sent in writing by email or by facsimile. Unless otherwise provided by the Company Act., the resolutions of the board of directors shall be adopted by a majority vote of the directors at a meeting of the board of directors attended by at least a majority of the entire directors of the Company.
Article 19: Chairman of the board of directors is the president of the board of directors. If the chairman of the board of directors is on leave or cannot exercise his/her powers or perform duties for any reason, an acting chairman shall be designated in accordance with Article 208 of the Company Act. The director shall attend the meeting of the board of directors in person. Whereas a director is unable to attend the meeting in person, he/she may issue a power of attorney for the given meeting specifying the scope of the authorized powers to authorize another director to attend the meeting on the director's behalf, provided that a director may represent only one other director at a meeting of the board of directors.

Article 20: Supervisors shall have the following authorities:

To investigate the financial conditions of the Company.
To examine the accounting books and documents of the Company.
To supervise the execution of business operations of the Company.
To review the Company’s budget and final accounts.
To audit the proposal of distributing surplus and subsidizing deficit.
Other rights empowered from the Company Act.

Article 21. The board of the directors is authorized to determine the remuneration for the

directors and supervisors, taking into account the extent of his/her participation and contribution to the Company and with reference to the normal standard of the industry regardless of profit or loss of the Company. The Company may pay the traffic allowance to the directors and supervisors with reference to the normal standard of the industry and purchase the liability insurance for the directors and supervisors.

Article 22: The Company may have managerial officers, whose appointment, dismissal, and remuneration shall be handled in accordance with Article 29 of the Company Act.

Chapter V Accounting

Article 23: The Company's fiscal year shall commence on January 1st of each year and ends on December 31st of the same year. The final accounts are settled at the end of each fiscal year.
Article 24: At the end of each fiscal year, the board of directors of the Company shall prepare the following documents, which shall be submitted to the supervisors for auditing thirty (30) days prior to the regular shareholders’ meeting pursuant to Article 228 of the Company Act. The supervisors shall submit the auditing report to the shareholders' meeting for approval.
Business report;
Financial statement;
Surplus earnings distribution or loss make‐up proposal

Article 25: Distribution of the dividends and bonuses shall be done in percentage of shares held by each shareholder accordingly. The Company shall not distribute dividends or bonuses when there is no profit.

Article 26: If the Company has earnings after the annual final accounts, after paying

profit‐seeking enterprise income tax as well as making up losses of the previous years, the Company shall first set aside ten percent (10%) of said earnings as legal reserve. Thereafter, the Company shall set aside or reverse a special reserve in accordance with the applicable laws and regulations. Any balance of the earnings shall be distributed as follows:

10% to 20% of balance of the earnings as bonus to employees.
2% of balance of the earnings as remuneration to the directors and supervisors.

Dividend to the shareholders.
The aforementioned distribution shall be submitted to the shareholders’ meeting by the board of directors to have the permission from the shareholders. Above bonus distributed to employees shall include those employees working in the subordinate companies of the Company that the company owns over fifty percent of the shareholding.
Article 27. The amount of dividend distributed shall be based on the annual earnings and the cumulative surplus in the previous years of the Company as well as taking into consideration of the Company’ earnings, capital structure and the future operational demand. The distribution of the dividend shall, depending on the factors of the capital demand and the dilution effect of earnings per share, adopt the policy of distributing stock dividends with cash dividends at the same time. As for the ratio of cash dividend distribution, it shall be not less than twenty percent (20%) of the total dividend distribution of the year. Actual amounts of distributions shall be based upon the resolution of the shareholders’ meeting.
Article 28. Profit appropriation is distributed to those who are entitled as shareholders in the shareholders' roster five (5) days prior to the record (base) date scheduled to distribute dividends and bonuses.

Chapter VI Supplementary Provisions

Article 29. The Company may act as a guarantor externally as required for business in accordance with the government’s regulation.
Article 30. The Company’s organizational regulations and operational rules shall be separately enacted.
Article 31. Any matters insufficiently provided for in the Articles of Incorporation shall be handled in accordance with the Company Act.
Article 32. With the consent of the promotes in the promoter‘s meeting, the Articles of
Incorporations were duly stipulated on December 20, 1996.
The Articles were duly amended on December 26, 1996 as the 1st amendment. The Articles were duly amended on January 21, 1997 as the 2[nd] amendment. The Articles were duly amended on February 10, 1997 as the 3rd amendment. The Articles were duly amended on March 14, 1997 as the 4th amendment. The Articles were duly amended on June 13, 1997 as the 5th amendment. The Articles were duly amended on January 29, 2000 as the 6th amendment.

The Articles were duly amended on June 1, 2000 as the 7th amendment. The Articles were duly amended on May 11, 2001 as the 8th amendment. The Articles were duly amended on December 13, 2001 as the 9th amendment. The Articles were duly amended on May 27, 2002 as the 10th amendment. The Articles were duly amended on June 9, 2003 as the 11th amendment. The Articles were duly amended on June 11, 2004 as the 12th amendment. The Articles were duly amended on June 14, 2005 as the 13th amendment. The Articles were duly amended on June 13, 2007 as the 14th amendment. The Articles were duly amended on June 16, 2009 as the 15th amendment. The Articles were duly amended on June 15, 2010 as the 16th amendment. The Articles were duly amended on June 13, 2012 as the 17th amendment.

Appendix 2 Regulations of Shareholders' Meeting Proceedings

Unless otherwise provided for under the applicable law, the shareholders' meetings of Altek Corporation ( hereinafter “ the Corporation”).shall be conducted according to the Corporation’s Regulations of Shareholders' Meeting Proceedings ( hereinafter “ these Regulations”).
Attending shareholders (or their proxies) shall wear an attendance card and submit a sign‐in card to show their present. The number of the shares represented by attending shareholders (or their proxies) shall be calculated according to the submitted sign‐in card.
The Corporation may appoint retained attorneys or certified public accountants or relevant personnel to attend a shareholders’ meeting.
Unless otherwise specified in the Company Act, the chair shall call the meeting to order at the appointed meeting time when the shareholders in attendance have represented a majority of the total number of issued shares. However, when the shareholders in attendance do not represent a majority of the total number of issued shares, the chair may announce the postponement of the meeting time. If the quorum is not met after two postponements and the shareholders in attendance represent one third or more of the total number of issued shares, a tentative resolution may be approved pursuant to Paragraph 1, Article 175 of the Company Act ： Shareholders present represent one‐third or more of the total number of issued shares, a tentative resolution may be passed by a majority of those present. When the number of shares represented by the shareholders in attendance reaches the statutory number, the chair may call the meeting to order and resubmit the tentative resolution for ratification from the congress.
The agenda of a shareholders' meeting shall be resolved by the board of directors. The meeting proceedings shall follow the order set in the agenda. After the meeting is closed, shareholders may not separately elect a chair and resume the meeting at the original or another venue, except in the case of closure announced by the chairperson in violation of these Regulations. Then a new chairperson may be elected with a majority vote of the attending shareholders to continue the meeting.
The Corporation shall record the process of the shareholders' meeting in audio or video type and keep the recording for at least one year.

Before speaking, an attending shareholder must specify on a speaker's slip his or her attendance card number and account name. The order in which they speak will be decided by the chair.
A shareholder may not speak more than twice on the same proposal, and a single speech may not exceed five minutes. However, the speech can extend three more minutes with the chair’s permission. If a corporate shareholder designated two or more representative in the shareholders' meeting, only one person may speak up for the same proposal. After the speech of an attending shareholder, the chairperson may respond in person or assign relevant personnel to respond.
When a proposal is under discussion, the chair may at an appropriate time declare the closure of the discussion and when necessary, the chair may also suspend the discussion and call for a vote.
A shareholder shall have one voting power in respect of each share in his/her/its possession.
If a shareholder authorizes a proxy to attend the shareholders' meeting, with the exception of a trust enterprise or a shareholder services agent approved by the competent securities authority, when one person is concurrently appointed as proxy by two or more shareholders, the voting rights represented by that proxy may not exceed 3% of the voting rights represented by the total number of issued shares. If that percentage is exceeded, the voting rights in excess of that percentage shall not be included in the calculation.
Except for special resolutions as specified in the Company Act that shall comply with the provisions therein, passage of a vote on a proposal shall require the consent of a majority of the voting rights of shareholders in attendance. When a non‐ballot voting method is adopted and upon inquiry by the chair there is no objection from shareholders in attendance, it is deemed passed, and its effectiveness shall be the same as a vote by ballot.
When there is an amendment or an alternative to a proposal, the chairperson shall present the amended or alternative proposal together with the original proposal and decide the order in which they will be put to a vote. When any one among them is passed, the other proposals will then be deemed rejected and no further voting shall be required.

Shareholder(s) may propose to the Corporation a proposal for discussion pursuant to

Article 172‐1 of the Company Act. When shareholders' proposal is the same type of proposals proposed by the board of directors, these proposals shall be presented together and paragraph 1 of article 12 shall apply mutatis mutandis to the condition herein. With regard to the proposals submitted by shareholders but not included in the agenda of the meeting, the cause of exclusion of such proposals and explanation will not be listed in the agenda or in the minutes of the meeting. But the board of directors shall note the reason of exclusion in the handbook for the annual meeting of shareholders.

The chair shall appoint scrutineers and ballot counters for votes on proposals; however, the scrutineers shall be shareholders.

While a meeting is in progress, the chair may consider the time schedule and announce a break.
Matters on which these Regulations are silent shall be handled in accordance with the Company Act and the Articles of Incorporation of the Corporation.
These Regulations and any amendments hereto shall be implemented after being passed by a shareholders’ meeting. The first amendment was made on May 27, 2002 and the second amendment was made on June 14, 2006.

Appendix 3 Rules for Election of Directors and Supervisors

Article	1	The election of the directors and supervisors of the Altek Corporation
		(hereinafter“ the Corporation”) shall be conducted in accordance with The
		Corporation’s Rules for Election of Directors and Supervisors (hereinafter
		“ these Rules”).

Article	2	The election of the directors and supervisors of the Corporation may be
		carried out simultaneously at a shareholders’ meeting.
Article	3	Directors and supervisors of the Corporation shall be elected from among
		persons with disposing capacity in accordance with these Rules. Where
		appointment of independent directors is required for the Corporation
		pursuant to the Articles of Incorporation of the Corporation, candidates
		nomination system shall be adopted for the election and qualifications of the
		independent directors shall be consistent with the requirements under the
		“Regulations Governing Appointment of Independent Directors and
		Compliance Matters for Public Companies.”

Article	4	The election of the directors and supervisors of the Corporation shall adopt
		the open‐ballot, cumulative voting method. Each voter is represented with
		their shareholder account number. Each share confers voting rights equal in
		number to the directors and supervisors to be elected; the votes may be cast
		for a single candidate or distributed among multiple candidates.

Article	5	In an election of the directors and supervisors of the Corporation, voting
		rights shall be calculated for independent and non‐independent directors
		separately according to the number of directors set forth in the Corporation’s
		Articles of Incorporation. Independent and non‐independent director
		candidates or supervisor candidates receiving the votes representing more
		voting rights, as indicated in the tally of the election votes shall be deemed
		an independent director elect, non‐independent director elect or supervisor
		elect. In the event of two or more candidates receiving the same weighted
		votes and the number of elected directors or supervisors exceeds the

required number, the candidates receiving the same weighted votes shall draw lots to decide who will be elected. If the candidates are absent from the shareholders’ meeting, the chairperson of the meeting shall draw lots on behalf of these absent candidates.

Article 6 The board of directors shall produce the votes with the Corporation’s stamp as well as fill in the voter’s shareholder account number and weighted voting rights.

Article 7 Before voting commences, the chair shall appoint a certain number of scrutineers, ballot tellers and ballot counters to carry out related duties.
Article 8 The ballot box used for voting shall be prepared by the board of directors, and shall be publicly opened and inspected by a scrutineer before the casting of ballots.
Article 9 If a candidate is a shareholder, a voter must fill in the candidate's name and shareholder account number in the "Candidate" box of the ballot; for a non‐shareholder candidate, the voter shall fill in the candidate's full name and identification card ( hereinafter “ID card”) number. When the candidate is a governmental organization or juristic person, the name of the governmental organization or juristic person shareholder and the name of their representative shall also be filled in the "Candidate" box of the ballot.
Article 10 A ballot is invalid under any of the circumstances listed below, and the number of voting rights conferred therein may not be credited to that candidate:
A ballot prepared by the Corporation by these Rules was not used.
A blank ballot cast in the ballot box that was not filled in by the voter.
The handwriting is unclear and indecipherable.
Any element of the name of the candidate, shareholder account number of the candidate and distributed voting right that was already filled in has been altered.
The candidate is a shareholder and their name, shareholder account number filled in the "Candidate" box on the ballot do not conform with the information on the shareholders roster; or where the candidate is not

a shareholder, and their name, ID card number filled in the "Candidate" box on the ballot do not match.

The candidate’s name is the same as other shareholders, whereas shareholder account number (or ID card number) is missing for the identification.
Other words or marks are written in addition to the candidates’ name, shareholder account number (or ID card number) and the distributed voting right.
The total number of the candidate filled in the "Candidate" box on the ballot exceeds the number of the candidate elected.
The total amount of the distributed voting right filled in the "Candidate" box on the ballot exceeds the voting right the voters have.
Article 11 When the total amount of the distributed voting right is lesser than the total voting right the voters have, the decreased part of the voting right is deemed as a waiver of voting power.
Article 12 After the casting of ballots is completed, the ballots shall be counted in front of the public, and the results shall be announced on the spot by the chair.
Article 13 The Corporation shall issue an election notice to each of the elected directors and supervisors.
Article 14 Matters on which these Rules are silent shall be handled in accordance with the Company Act and the Articles of Incorporation of the Corporation.
Article 15 These Rules and any amendments hereto, shall be implemented after being passed by a shareholders’ meeting. The first amendment was made on May 27, 2002 ； the second amendment was made on June 17, 2007 ； the third amendment was made on June 13, 2012.

AI assistant

Altek — AGM Information 2016

52290_rns_2016-08-03_fcfb5585-1147-46e3-b96f-6949bd60c7e5.pdf

【 Translation 】

Altek Corporation

Handbook for

2016 Annual General Shareholders’ Meeting

Place: No.2, Zhanye 1st Rd., Hsinchu City, Taiwan

Table of Contents

IV. Appendices

Altek Corporation

Procedure for 2016 Annual General Shareholders’ Meeting

1. Call Meeting to Order

2. Chairman’s Address

3. Discussion Item

4. Report Items

5. Recognition Items

6. Discussion and Election Items

7. Special Motions

8. Adjournment

Discussion Item‐‐

1. To revise the Articles of Incorporation ( Proposed by the Board of Directors)

Explanation:

Reports Items

1. Implementation of Share Buyback Program.

Explanation:

2. Distribution of Employees’ compensation as well as the remuneration for the Directors and Supervisors.

Explanation:

3. 2015 Business Report

4. 2015 Supervisors Audit report

Recognition Items

1. 2015 Business Report and Financial Statements (Proposed by the Board of Directors)

Explanation:

Resolution:

2. Distribution of 2015 Earnings (Proposed by the Board of Directors)

Explanation:

Resolution:

ALTEK CORPORATION SURPLUS EARNINGS DISTRIBUTION TABLE

Year 2015

Discussion and Election Items

Explanation:

Resolution:

2. To approve the revisions to ”Procedures for Acquisition or Disposal of Assets”. ( Proposed by the Board of Directors)

Explanation:

Resolution:

Resolution:

4. To approve the cash injection of Altek Semiconductor (Cayman) Co., Ltd., one of Altek’s subsidiaries. (Proposed by the Board of Directors)

Explanation:

Resolution:

5. To approve the adjustment of the investment structure of the Company’s subsidiary‐Altek Biotechnology Corporation as well as to approve the cash injection..etc. (Proposed by the Board of Directors)

Explanation:

Resolution:

6. Election to Fill the Vacancy of 7th Independent Director. ( Proposed by the Board of Directors)

Explanation:

Voting Results:

Special Motions

Adjournment

Attachment 1

Comparison Table for” Articles of Incorporation” ‐‐Before and After Revision

Attachment 2

2015 Business Report

Attachment 3

Supervisors’ Audit Report

Altek Corporation Supervisors:

Attachment 4

2015 CPA Audit Report and Financial Statements (Consolidated)

ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31

ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31

ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31

ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31

ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

ALTEK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

Attachment 5

Comparison Table for ”Procedures for Acquisition or Disposal of Assets”‐‐Before and After Revision

Attachment 6

General principles, methods and contents of private placement of Altek Corp.

Second time

(2)Private placement carried out in two times First time

Second time

Attachment 7

Altek AGM Information 2016